Brazil sees biofuel demand as unsustainable

Loek Boonekamp, head of the OECDÂ´s commercial and
marketing division told attendees at Agra FNP's Outlook Brazil conference in Sao
Paulo that plans to boost biofuel production, often cannot be justified in
economic terms and may be unsustainable.

General Manager of Business for China Tex,
Liones Severo, thinks the importance of preventing the worldÂ´s climate from
deteriorating further justifies the increased use of biofuels.

Boonekamp feels that biofuel production will be damaging to
the animal feed and meat industries. Even if the oil price fell to the point
that it was no longer economic to make biofuels from grains or oilseeds, which
stands at about US$90 per barrel in the EU (US$60 in the US), the decision to go
ahead has been taken. The consequences will have to be lived with, even though
it will prove to be unsustainable, he added.

The picture is not entirely negative as far as animal feed is concerned,
Emma Cardy-Brown of Rabobank said. Although the price of maize will certainly
increase as more is used to make ethanol, huge amounts of distillers grain, a
by-product of ethanol production, will become available. This, as well as
soymeal, can be used to feed cattle and pigs and is likely to fall in
price.

However, finding alternatives for the maize used by the poultry meat
industry will be more difficult and the poultry industry will have to be more
inventive in future.